TODAY’S STUDY: CLIMATE CHANGE AND MODERN RIDES

As the electric-powered vehicle age is dawning, the noted Pew Center has just released a detailed look at climate change-inducing greenhouse gas emissions from the transport sector and solutions for cutting back on them. The report is wide-ranging and, therefore, can seem equivocal but the bottom line is crystal clear: There are short-term measures that will mitigate the harms of the internal combustion engine but the only long-term measures that make sense require the end of fossil fuel-powered transportation.

Reducing Greenhouse Gas Emissions from U.S. Transportation
Howard H. Baker, Jr. and Steven E. Plotkin, January 2011 (Pew Center on Global Climate Change)

Executive Summary

This report examines the prospects for substantially reducing the greenhouse gas (GHG) emissions from the U.S. transportation sector, which accounts for 27 percent of the GHG emissions of the entire U.S. economy and 30 percent of the world’s transportation GHG emissions. Without shifts in existing policies, the U.S. transportation sector’s GHG emissions are expected to grow by about 10 percent by 2035, and will still account for a quarter of global transportation emissions at that time. If there is to be any hope that damages from climate change can be held to moderate levels, these trends must change. This report shows that through a combination of policies and improved technologies, these trends can be changed. It is possible to cut GHG emissions from the transportation sector cost-effectively by up to 65 percent below 2010 levels by 2050 by improving vehicle efficiency, shifting to less carbon intensive fuels, changing travel behavior, and operating more efficiently. A major co-benefit of reducing transportation’s GHG emissions is the resulting reductions in oil use and improvements in energy security.

This report develops three scenarios of improved transportation efficiency and reduced GHG emissions through 2050, with both technological progress and policy ambition increasing from the first to the third scenario. The three scenarios show GHG reductions of 17, 39, and 65 percent from 2010 emissions levels in the year 2050.

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Passenger Cars and Light Trucks

Light-duty vehicles (LDVs)—passenger cars and light trucks—account for nearly three fifths of the total energy use and GHG emissions of the U.S. transportation sector. Currently, the average fuel economy of new LDVs is 26 miles per gallon (mpg) on Environmental Protection Agency (EPA) vehicle certification tests, or about 21 to 22 mpg when adjusted for on-road conditions. Existing fuel economy standards and GHG emission standards require that this average rise to over 35 mpg (about 29 mpg on-road) in 2016—a 35 percent improvement. By 2035, if new standards or market pressures push vehicle designers to accelerate their efforts to improve fuel efficiency, a new midsize car might attain about 50 mpg on-road or more with a conventional drivetrain and 75 mpg on-road with a hybrid-electric drive train.

The average efficiency of the cars and trucks on the road will grow more slowly, because it takes about 15 years to turn over the entire fleet. But by 2035, the LDV fleet could attain an on-road fuel economy of about 34 to 41 mpg, rising to 45 to 59 mpg by 2050. That is much higher than today’s fleet (21 mpg) or the 29.3 mpg projected by the Energy Information Administration’s (EIA) Annual Energy Outlook 2010 for 2035, which assumes no new incentives to improve fuel efficiency.

Shifting to alternative fuels can also bring significant reductions in GHG emissions and oil use. While there are many potential alternative fuels including natural gas, the fuels that will likely play the greatest role in the future are electricity, liquid fuels from biomass, and hydrogen:

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•• Electricity has recently reappeared as a strong contender, thanks to the development of lithium-ion batteries and plug-in hybrid electric vehicles (PHEVs). PHEVs with electric ranges of 10 to 40 miles overcome the range limitations of pure electric vehicles (by allowing the vehicle to shift to gasoline operation when the battery is depleted). Battery cost and lifetime remain issues, and the GHG benefits of PHEVs depend on the extent to which the electric grid is decarbonized. The Low and Mid Mitigation Scenarios assume 1 and 3 million PHEVs will be on the road in 2035 (between 0.3 and 1 percent of total LDVs expected in that year), with the number rising to 10 to 20 million by 2050 (3 and 6 percent of total LDVs). The scenarios assume carbon intensity reductions in the electricity sector, so that PHEVs will play a substantial role in reducing transportation GHG emissions.

•• Liquid fuels from biomass offer another strong opportunity. Certain types of biomass fuels can virtually eliminate GHG emissions (on a lifecycle basis) from the vehicles in which they are used. Two key remaining issues are reducing biomass fuel costs and preventing adverse land use impacts. In the Low and Mid Mitigation Scenarios, advanced biofuels production rises to 20 to 30 billion gallons by 2035 and 35 to 45 billion gallons by 2050 (with an additional 15 billion gallons of corn-based ethanol in both years), replacing 19 and 25 percent of gasoline consumption in 2035.

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•• Hydrogen remains a strong prospect, although earlier enthusiasm has waned. Hydrogen fuel cell vehicles (FCVs) emit no GHGs or other pollutants, although their lifecycle emissions depend on how the hydrogen is produced and distributed. FCVs have already demonstrated ranges of 300 miles, while refueling nearly as quickly as gasoline vehicles. However, hydrogen requires a new refueling infrastructure and the vehicles remain very expensive. Hydrogen vehicle penetration was only included in the High Mitigation Scenario for this report.

•• Alternative Fuels in the High Mitigation Scenario. Whereas the alternative fuel mix was specified in the Low and Mid Mitigation Scenarios, a range of plausible combinations of alternative fuels was considered for the High Mitigation Scenario. These include a vehicle fleet that is 40 percent or more hydrogen fuel cell vehicles or one that is about one-third or more battery electric and PHEVs, and uses fuel blended with 25 percent advanced biofuels.

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In the future, the success of alternative fuel vehicles, and the substitution of significant quantities of gasoline and diesel fuels, will depend on several factors:

• The new vehicles and fuels must become cost competitive.

• A research, development, demonstration, and deployment (RDD&D) program must be sustained and robust.

• Major mistakes (such as safety problems) on the part of vehicle designers and fuel providers must be avoided.

• Government and/or industry must subsidize elements of the new fuel system until it becomes self-sustaining.

• Gasoline and diesel prices must remain high due to sustained high world oil prices or government’s willingness to use taxes or other pricing policies.

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Trucks and Buses

Freight trucks carry 70 percent of the dollar value and over a third of the total ton-miles of U.S. freight. They emit 17.5 percent of total U.S. transportation carbon dioxide (CO2, the predominant GHG) emissions. Two-thirds of trucking’s energy use and GHG emissions are from heavy-duty long-haul tractor-trailers. Two recent studies have concluded that practical technologies and logistical changes could reduce the fuel use and GHG emissions of a tractor-trailer by 40 to 50 percent within about 10 years. Technologies are also available to reduce fuel use and GHG emissions from other medium- and heavy-duty vehicles by 30 to 50 percent. This report’s three scenarios envision medium- and heavy-duty truck on-road fuel economy improving by 30 to 40 percent by 2035 and 40 to 55 percent by 2050.

Commercial Air Transportation, Rail, and Shipping

Air transportation accounts for about 10 percent of U.S. transportation GHG emissions. The impact of aviation emissions on the climate is still not well understood, however, because it depends not only on CO2 emissions but also on the extent of the additional effects of other airplane emissions in the upper atmosphere. For new aircraft, reductions in CO2 emissions of 25 to 35 percent should be achievable over the next decade or two through engine, propulsion, and airframe improvements. Aircraft are also able to use alternative fuels. Lastly, there is the potential to improve operating efficiency by 5 to 10 percent through advanced air traffic management and efficient flight planning.

Rail carries 40 percent of U.S. freight (in ton-miles) while using only 2 percent of transportation’s energy and producing 2 percent of transportation GHG emissions. Rail energy intensity could be reduced by 15 to 30 percent over the next two decades and by 20 to 40 percent by 2050 through improved locomotive efficiency, greater use of regenerative braking, reductions in the empty weight of rolling stock, and improved operations. Comparable improvements are possible for domestic and international shipping.


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Highway System Efficiency

Improving the operating efficiency of the transportation system could reduce its GHG emissions by several percent. The possible steps include driving more efficiently; improving freight logistics, route choices, and trip-making choices; increasing vehicle occupancy rates, smoothing traffic flow, and improving speed management. In the long run, automated control of long-haul truck travel could reduce emissions and improve highway safety. For most system efficiency strategies, the co-benefit of reduced traffic congestion and increased highway capacity substantially exceed the GHG benefits.

Shifting Traffic to More Energy-Efficient Modes

Moving passenger and freight movement to more efficient modes is well worth pursuing, but can be expected to yield only moderate reductions in GHG emissions and fuel use.

Currently, public transit supplies only about 1 percent of total passenger-miles in the United States and, on average, is only modestly more energy-efficient than personal vehicles. However, many transit systems with high occupancy rates and efficient designs use much less energy and have much lower GHG emissions than personal vehicles. Strategies to promote transit in order to reduce GHG emissions must focus on improving the efficiency of current systems and promoting the most efficient systems.

The best opportunities for shifting truck freight traffic to more efficient rail and ships involve improving intermodal transfers and improving freight logistics to make them more attractive to shippers. However, it will be difficult to attain large reductions in GHG emissions from mode shifts because of growing demands for just-in-time delivery and trucking’s scheduling flexibility and ability to handle small shipments and short distances cost-effectively. The three scenarios project that improved logistics will reduce overall freight shipments by 0, 2.3, and 5.0 percent by 2035 compared to the report’s baseline, and remain constant at that level of reduction through 2050.

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Moving Towards Compact Development

Reversing the United States’ longstanding trends towards lower density development by promoting compact, mixed-use development would reduce the growth of travel and yield other benefits. Compact development shortens trip lengths and promotes walking, bicycling, and public transit.

A recent National Research Council study and two other recent studies conclude that GHG emissions could be reduced by 10 percent or more by 2050 if 75 to 90 percent of all new development were “compact.” Because of competing priorities at the local level, however, the scenarios in this study achieve reductions in travel and GHG
emissions of 0.5 to 2.0 percent by 2035 and 1.5 percent to 5.0 percent by 2050.

Policies to Promote GHG Mitigation

GHG emissions are a classic example of an environmental externality, a problem that markets generally fail to solve without the assistance of public policy. Just as there is no one technology that can achieve the necessary emission reductions from transportation, there is no single policy that can bring them about. Some of the policies that could play major roles are described below.

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Fuel Economy and GHG Standards

Experience in the United States and other major automobile manufacturing nations has shown that fuel economy or emission standards can make large, cost-effective reductions in GHG emissions. In 2009, the United States set standards requiring an average of about 35 mpg (EPA certification test values) for the combined fleet of autos and light trucks to take effect in 2016, and new standards for the 2017 to 2025 period are being developed. Separate standards for medium and heavy-duty trucks are also being developed.

Renewable and Low-Carbon Fuels Standards

Renewable or Low-Carbon Fuels Standards are policies intended to displace oil use, reduce the carbon content of fuels, and stimulate innovation that will bring down the costs of low-carbon fuels. At present, the federal Renewable Fuels Standard requires that 36 billion gallons (about 12 percent of gasoline consumption) of renewable fuels be sold for highway use by 2022. Twenty-one billion of the 36 billion gallons must be either “advanced” or cellulosic biofuel with 50 percent and 60 percent lower lifecycle GHG emissions, respectively, than gasoline. California has a Low-Carbon Fuels Standard (LCFS) that requires a 10 percent reduction of lifecycle GHG emissions.

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Pricing Transportation

Putting a price on carbon is a critical component of a comprehensive GHG mitigation policy. Carbon pricing will increase energy efficiency, promote low-carbon fuels, encourage environmentally beneficial travel choices, and motivate innovation. But pricing carbon will not be sufficient for transportation for a variety of reasons. First, consumer markets for energy efficiency do not appear to respond efficiently to energy prices. In addition, governments play key roles in providing and operating transportation infrastructure, and in shaping the geography in which travel takes place. Also, the private sector underinvests in all RDD&D, including for low-carbon transportation.

There are major opportunities to change the way transportation is paid for, without increasing its total cost, so as to encourage GHG mitigation. Examples include pay-at-the-pump (PATP) or pay-as-you-drive motor vehicle insurance, conversion of the motor fuel excise tax to a comprehensive energy user fee indexed to average vehicle efficiency, congestion pricing, and pricing parking. Feebates, a graduated rebate to vehicles with lower GHG emissions offset by fees on vehicles with higher GHG emissions, can be an effective complement to or potential replacement for emission standards.

Vehicle and Fuel Transition

GHG emission reductions of more than 50 percent below current levels are likely to require a transition to a completely different source of energy for transportation, such as electricity or hydrogen. Strong, durable, and adaptable public policies will be needed to overcome the “lock-in” of petroleum-fueled, internal combustion engine technology. Performance standards that stimulate innovation in all competing technologies and fuels are important, but some fuel and technology-specific policies are also needed to ensure that promising technologies are developed sufficiently for consumers and society to make judgments about their costs and benefits. RDD&D support is critical. Deployment assistance should be provided to the extent that societal benefits exceed public investment. All policies must be continually reevaluated and adjusted based on new information and experience.

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Mitigation Potential: Scenarios for 2035 and 2050

Three scenarios were developed to illustrate a range of GHG mitigation potential for the U.S. transportation sector through 2050, depending on public attitudes about climate change, the extent of technological progress, and the scope and forcefulness of public policies. The Base Case is the EIA’s 2010 AEO Reference Case projection, extrapolated from 2035 to 2050. The Base Case includes relatively high energy prices, as well as existing emission standards and a substantial increase in renewable fuel use. Nevertheless, transportation’s CO2 emissions increase 28 percent from 1.8 gigatons in 2010 to 2.3 gigatons in 2050 (Figure ES-1). Heavy-duty truck emissions increase the most (0.2 gigatons) and the fastest (a 70 percent increase over 2010).

The combined impacts of the policies and measures are shown in Table ES-1 by mode, mitigation scenario, and year. All three scenarios incorporate a price on carbon, obtained directly from a carbon tax or indirectly from a carbon cap-and-trade system. The Low Mitigation Case includes post-2016 GHG emissions standards for LDVs requiring reductions of about 2 percent per year. The scenario includes an energy efficiency indexed highway user fee, modest improvements in energy efficiency in non-highway modes, and little additional alternative fuel use beyond the Base Case (which includes the U.S. Renewable Fuel Standard).

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The Mid Mitigation Case reflects a greater public commitment to reducing GHG emissions, more rapid technological progress, and a tolerance for some additional innovative pricing policies. Emission standards are more stringent, and public commitment is reflected in greater reductions from energy-efficient driving, land use strategies, an acceptance of feebates, and minimum liability PATP vehicle insurance.

The High Mitigation Case assumes rapid technological progress and aggressive emission standards. Public urgency about addressing climate change is reflected in greater effectiveness of policies such as eco-driving, land use policies, and the acceptance of congestion pricing and more comprehensive PATP insurance. In the High Mitigation Case, a transition to electric and/or hydrogen vehicles is well underway by 2050. Finally, automated highways are introduced by 2050 on major routes.

The emission reductions below 2010 levels achieved in 2050 by these scenarios range from 17 percent in the Low Mitigation Case to 65 percent in the High Mitigation Case (Figure ES-2). Technological improvements to vehicle energy efficiency, low-carbon energy sources, and all other strategies make roughly comparable contributions to GHG mitigation in the High Mitigation Case. No single technology, policy, or mode is able to accomplish a 65 percent reduction in total transportation GHG emissions. Achieving reductions of that magnitude requires a comprehensive strategy, with strong public support, sustained by rapid technological progress.

Transportation will remain a cornerstone of the U.S. economy and a fundamental contributor to Americans’ quality of life to 2050 and beyond. The enormous value to society of the mobility of people and commodities must be preserved. Because rates of technological progress and future energy prices are uncertain, the GHG mitigation strategy for transportation must be adaptable. This can be accomplished by monitoring technological progress to insure that policies remain cost effective, taking advantage of faster progress when it occurs, and adjusting to disappointments accordingly. This report presents a demonstration of the likely feasibility of reducing future GHG emissions from transportation by up to 65 percent below 2010 levels by 2050. Greater or lesser reductions may turn out to be appropriate in the future. Fortunately, there is a great deal that can be put in place with confidence today—both short-term policies that will achieve reductions right away, and long-term policies that can be adjusted as the future unfolds.

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Conclusion

The U.S. transportation sector is a major source of global GHG emissions.

Each year it emits more CO2 than any other nation’s entire economy, with the sole exception of China. In 2008, transportation accounted for 27 percent of total U.S. GHG emissions. Essentially all of transportation’s CO2 emissions are due to its energy use, and CO2 is the predominant GHG produced by transportation, accounting for 95 percent of its total emissions. Highway vehicles are responsible for 78 percent of the sector’s GHG emissions. In order to limit the damage due to climate change, developed countries like the United States will have to reduce their GHG emissions by a significant amount. This report uses an economy-wide target of at least 50 percent below current levels by 2050. To achieve such dramatic, economy-wide GHG reductions, transportation will have to play a major role.

It is likely that the U.S. transportation sector will be able to make reductions in GHG emissions on the order of 50 percent or more by 2050 cost-effectively, provided that strong policy measures are implemented and that substantial progress is made in advanced vehicle technologies and low-carbon energy sources.

Just as no one technology can achieve the emission reductions that appear to be necessary, no single policy can bring them about. Those policies include pricing carbon, setting stricter fuel economy or emissions standards, converting the current motor fuel tax to a comprehensive energy user fee (indexed to the average energy efficiency of motor vehicles), instituting feebates tied to new vehicle emission rates, and converting part of motor vehicle insurance to PATP or PAYD insurance. State and local governments and metropolitan planning organizations around the United States have also shown that there are ways to reduce demand for motor vehicle travel while preserving or enhancing accessibility to homes, businesses, and leisure activities. Finally, there are ways to meaningfully improve the operating efficiency of transportation systems via advanced air traffic management and flight planning, training in eco-driving for motorists, intelligent vehicles and traffic controls, and ultimately, automated highways for heavy and light-duty vehicles.

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Energy efficiency improvements must play a major role in GHG mitigation. A reasonable fuel efficiency target for 2050 is on-road fleet average emission rates of 195 to 150 grams per mile for all petroleum-fueled LDVs (about 45 to 60 miles per gallon). For heavy-duty vehicles, existing technologies and measures can cost-effectively improve the fuel economy of new vehicles by 30 to 50 percent, reducing GHG emission rates by up to one third. For new aircraft, reductions in CO2 emissions of 25 to 35 percent should be achievable over the next decade or two. Rail energy intensity could be reduced by 15 to 30 percent over the next two decades and by 20 to 40 percent by 2050. Comparable improvements are possible for shipping.

Increased use of biofuels with low lifecycle GHG emissions is another important option for reducing transportation’s GHG emissions. The future potential of biofuels is substantial; they could displace up to 15 percent of transportation fuel use in 2035 and 35 percent or more in 2050. However, at this time it is unclear which feedstocks, conversion processes, and final uses of bioenergy in transportation are the most advantageous. Research and learning-by-doing are needed to comprehensively assess the costs and benefits of alternative biofuel uses, from ethanol in passenger cars to distillate biofuel in jet aircraft.

Deep reductions in GHG emissions from LDVs by 2050 will very likely require a transition to hydrogen, electricity, or a combination of the two as the principal source of energy. Both have shortcomings at the present time, but if the technologies can be successfully developed, the excess financial costs of a transition should be manageable.

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Mitigating GHG emissions by designing communities that are conducive to shorter vehicle trips and non-motorized travel could achieve a 1 to 2 percent reduction in nationwide vehicle travel by 2035 and a 1.5 to 5 percent reduction by 2050. Further, individual communities with a commitment to creating a travel-efficient environment could do substantially more.

Pricing can be a very powerful tool for increasing energy efficiency, promoting low-carbon fuels, and encouraging environmentally beneficial travel choices. The American public, however, has historically resisted policies for transportation that use prices to influence environmental decisions. For this reason, this report has focused on pricing policies that change the incidence of transportation costs without increasing overall costs. Notable exceptions are pricing carbon and pricing congestion.

This report uses three scenarios to illustrate a range of GHG mitigation potential for the U.S. transportation sector. The emission reductions below 2010 levels achieved in 2050 by these scenarios range from 17 percent in the Low Mitigation Scenario to 65 percent in the High Mitigation Scenario. Technological improvements to vehicle energy efficiency, low-carbon energy sources, and all other strategies make roughly comparable contributions to GHG mitigation in the High Mitigation Scenario.

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No single technology, no single policy, and no single mode is able to accomplish a 65 percent reduction in transportation’s GHG emissions. Achieving reductions of that magnitude requires a comprehensive strategy, with strong public support, sustained by rapid technological progress. Transportation will remain a cornerstone of the U.S. economy and a fundamental contributor to Americans’ quality of life to 2050 and beyond. The enormous value to society of the mobility of people and commodities must be preserved. Because rates of technological progress and future energy prices are uncertain, the GHG mitigation strategy for transportation must be adaptable.

This report demonstrates that with cost-effective policies and plausible technological progress and shifts in consumer behavior, the United States can reduce GHG emissions from transportation by 65 percent below 2010 levels by 2050. Greater or lesser reductions may turn out to be appropriate in the future. In any case, a great deal can be done with confidence today. It is imperative to get started right away, and to adjust as the future unfolds.